An Oireachtas committee earlier this year recommended that charges should be abolished except for excessive use, and domestic water use should be funded through general taxation.
Households who have paid the charges can expect to get as much as €325 back from Irish Water as Varadkar's new Government looks set to finally put the matter to bed.
It is not yet clear how the refunds will be made and the spokesperson said legislation may be required.
In an interview with The Sunday Independent, the Taoiseach said: "There's a cost".
He said the repayments will not be part of the upcoming Budget, with refunds to begin before the budgetary measures are announced in October. In relation to more complex cases the refunds may take longer than the end of the year.
It is unclear what money will go to refunding the charges, but Varadkar and Government sources have suggested that it may not come from Budget 2018 funds.
That's according to the Taoiseach Leo Varadkar, who's promising to press ahead with the 170 million euro refund.